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FOI Advisory Council Opinion AO-04-17

AO-04-17

May 5, 2017

Douglas Pons
Via Electronic Mail

The staff of the Freedom of Information Advisory Council is authorized to issue advisory opinions. The ensuing staff advisory opinion is based solely upon the information presented in your electronic mail of March 16, 2017.

Dear Mr. Pons:

You have asked whether the Greater Williamsburg Chamber and Tourism Alliance (the Chamber) is a public body subject to the Virginia Freedom of Information Act (FOIA). As background, you stated that the Chamber is an organization which supports local business and performs tourism marketing for the Historic Triangle. Further, you stated that the Chamber was not created by a public body but has for many years been financially supported, in part, by the three jurisdictions comprising the Historic Triangle (James City County, York County, and the City of Williamsburg). You explained that the localities give money to the Chamber primarily to support the Chamber’s tourism marketing functions. You related that over the last several years, the amount of the public funding provided has comprised an increasingly greater share of the Chamber’s budget, and that this year, the amount of funding received from the Historic Triangle localities comprises 68% of the Chamber's total budget. You also wrote that the public funding is in the form of a general budget appropriation, and is not provided pursuant to a service agreement or any other form of contractual obligation. Additionally, you noted that prior opinions from this office have established a rule of thumb that an organization would be considered a public body as that term is defined in § 2.2-3701 if it receives two-thirds or more of its funding from public funds.1 You then posed two questions: (1) whether the Chamber would be considered a public body for purposes of complying with the meeting and records requirements of FOIA, and (2) whether the Chamber would cease to be considered a public body subject to FOIA if the percentage of their funding were to drop below 66% of their total budget in the future.

The general policy of FOIA set forth in subsection B of § 2.2-3700 is to ensure "the people of the Commonwealth ready access to public records in the custody of a public body or its officers and employees, and free entry to meetings of public bodies wherein the business of the people is being conducted." The policy statement goes on to direct that the provisions of FOIA "shall be liberally construed to promote an increased awareness by all persons of governmental activities and afford every opportunity to citizens to witness the operations of government." The definition of "public body" in § 2.2-3701 includes various government entities as well as "other organizations, corporations or agencies in the Commonwealth supported wholly or principally by public funds." You noted that in construing what was meant by "supported...principally by public funds," this office has previously opined that

an entity that was supported principally by public funds would receive its main source of money for its operating budget from government sources. Construing this in a liberal fashion, as directed by the policy of FOIA, this means something less than 100 percent, yet more than a simple majority of the money in the budget. As a general rule, one could construe that an entity that received at least two-thirds, or 66.6 percent, of its operating budget from government sources would be supported principally by public funds.2

That opinion went on to state that "the question of whether an entity is supported principally by public funds remains a question of fact, and an entity that receives less than two-thirds of its funding from government sources could still be considered a public body." This office has applied the two-thirds rule of thumb along with a case-by-case factual analysis in subsequent opinions.3 In considering various factual scenarios, this office has further opined that "whether an entity is considered a public body at any given time depends on the status of the entity (e.g., whether it is wholly or principally supported by public funds) at the time a request for records is made under FOIA."4 Additionally, this office has excluded money derived from arm's-length contracts and competitive grants when considering the source of money that would be considered "public funds" for FOIA purposes.5 If money from such arm's-length transactions were considered public funds, it would have a chilling effect on the willingness of private companies to contract with government, as it would require private companies to open their records to public scrutiny solely because they entered into a contract with government.6Research did not reveal any controlling opinions from the Supreme Court of Virginia addressing these issues, but at least two circuit court opinions have cited the two-thirds rule of thumb offered by this office.7

The facts you presented are that the Chamber currently receives 68% of its support from public funds, and that those funds come from budget appropriations, not arm's-length transactions. Applying the law to those facts, the answer to your first question is that the Chamber appears to be "supported...principally by public funds" and therefore is a public body subject to FOIA. Given the facts presented, the Chamber must comply with FOIA's requirements for both public meetings and public records. Your second question asked whether the Chamber would cease to be a public body should the Chamber's public funding drop below two-thirds of its total budget at some point in the future. As stated previously, the two-thirds rule of thumb

is merely a guideline, and that ultimately the question of whether an entity is supported principally by public funds is a question of fact that must be decided on a case-by-case basis. [Freedom of Information Advisory Opinion 36 (2001)] also postulated that if 55 percent of the budget came from public funds and 45 percent from another single source, then the public funds would not be the principal source. However, if the 45 percent came from a number of sources, each representing a relatively small fraction of the overall budget, then the 55 percent from public funds would be the principal source.

Without knowing the precise proportions and sources of future funding, it is not possible to opine whether the Chamber would be considered a public body at any particular time going forward. However, we can opine that if the Chamber's public funding fell below two-thirds of its total funding to the extent that public funds were no longer the principle source of its support, then the Chamber would cease to be considered a public body subject to FOIA.

Thank you for contacting this office. I hope that I have been of assistance.